Not everyone dreams of owning their own home, in fact according to McCrindle’s Renter of the Future report, almost one third of renters in Australia said they chose to rent not for financial reasons, but because of the lifestyle benefits it provides.
Let’s have a look at some of the most compelling reasons as mentioned by tenants.
Renting tends to be more affordable than buying. In many cases monthly rental payments are usually lower than mortgage repayments, particularly in major capital cities. For young professionals who are seeking a fast paced lifestyle and career opportunities in the city, renting can be a big advantage. It gives greater value for your money, if you can afford the rent where you want to live and still have extra to put into your savings account each week you may be better off plus you don’t have a mortgage debt and the responsibility that involves.
Almost 40 per cent of renters said that the freedom to change where they live easily is a huge benefit of renting. In most cases, a tenancy agreement in Australia only requires a commitment of 6 to 12 months.
Realise that you don’t quite like the neighbourhood? Want to move closer or further to the CBD? Find a new job elsewhere? After this period, there is no obligation to renew the contract and you’re free to simply move to a location that is more ideal.
Upsizing and downsizing
Maybe you have a partner that’s moving in or you’ve decided to work from home and need an extra room. Either way, it’s not uncommon for space requirements to change all the time. In McCrindle’s study, 24 per cent of people recognised this, citing the ability to upsize or downsize their home easily as a great advantage. This way, you can also adapt your living arrangements to your finances without too much hassle.
No Maintenance costs or repair bills
A definite advantage renters have over homeowners is that they have no maintenance costs or repair bills to pay off. When you rent a property, your landlord is responsible for all maintenance and repair costs. If a property’s appliance stops working or your roof starts to leak you do not have any financial responsibility to have these things fixed (in most cases). Homeowners, on the other hand, are responsible for all of their own repair, maintenance and renovation costs. Depending on what the repair is, these costs can be quite extensive.
Access to Amenities
Another financial benefit to renting, over buying a house of your own is having access to amenities that would otherwise be an enormous expense. Luxuries such as an in-ground pool or a fitness center come standard at many midscale to upscale apartment complexes with no additional charge to tenants. If a homeowner wants to match these amenities, he or she can expect to pay thousands of dollars in installation and maintenance costs. Similarly, apartment / unit owners need to pay monthly fees to pay for access to these amenities.
No Land Tax
An obvious benefit that renters have over homeowners is that they do not have to pay land taxes. Land tax can be a hefty burden for homeowners and the tax varies by state. The landlord is responsible for the payment of this tax and therefore as a renter you are not responsible for it.